Mobile phone services: Government takes Tk 56 out of every Tk 100
Out of every Tk 100 earned by mobile operators from mobile phone services, the government takes Tk 56 in taxes and fees. Analysts say past governments turned the telecommunications sector into a major source of revenue collection. Ordinary people are the victims of this policy. Operators, after paying the government and trying to maintain their own earnings, do not invest sufficiently in improving service quality. Previous governments also placed greater emphasis on revenue collection rather than reducing mobile service costs and improving quality.
Against this backdrop, World Telecommunication and Information Society Day is being observed in the country today, Sunday. This year’s theme is: “Digital Lifestyle: Stability in Connectivity, Strength in Resilience.”
The number of mobile phone users in the country is around 186.1 million (in many cases, one person uses multiple SIM cards). Mobile services are now connected to almost every aspect of people’s lives, including services, business, entertainment, and more. However, compared with neighbouring countries and economies of similar standing, Bangladesh lags behind in smartphone and internet usage.
Analysts mainly blame the high cost of smartphones and expensive mobile services for this. Operators, on the other hand, blame high taxes and fees. Tanvir Mohammad, Chief Corporate Affairs Officer of Grameenphone, told Prothom Alo that Bangladesh needs to bring telecommunications sector tax rates down to a reasonable level in order to protect consumers’ interests, ensure continuous investment, expand digital lifestyles, and reduce the digital divide. He said the country’s economy would benefit if that were done.
The government earns revenue from the telecommunications sector in two ways. One is through taxes, and the other is through various fees, including spectrum charges.
According to operators, consumers currently have to pay 18 per cent Value Added Tax (VAT), 20 per cent supplementary duty, and a 1 per cent surcharge on mobile services. Altogether, the total tax burden on consumers stands at 39 per cent. Purchasing a new SIM card or replacing a lost one costs Tk 300. The tax rate on operators’ profits ranges from 40 to 45 per cent.
Operators also have to regularly purchase spectrum at high prices and renew it. For example, Grameenphone recently bought spectrum in the 700 MHz band at Tk 2.37 billion per MHz, spending a total of Tk 20.19 billion.
Operators are also required to share revenue with the Bangladesh Telecommunication Regulatory Commission (BTRC) at a rate of 5.5 per cent. They must additionally contribute 1 per cent to the social responsibility fund.
Combined, 56 per cent of total revenue goes into government coffers. According to data from the global mobile operators’ association GSMA, the global average in this regard is 22 per cent, while the average rate in the Asia-Pacific region is 25 per cent.
Sahed Alam, Chief Corporate and Regulatory Affairs Officer of mobile operator Robi Axiata, told Prothom Alo that the effective tax and mandatory payment burden on telecom operators stands at around 68 to 72 per cent. As a result, opportunities for future investment are becoming extremely limited. He said the industry has faced this reality for the past 15 years.
Meanwhile, all operators will have to renew previously acquired spectrum this year. The renewal fee is expected to total around Tk 168.5 billion. On top of that, they will have to pay 7.5 per cent VAT, amounting to Tk 12.64 billion.
Taimur Rahman, Chief Corporate Affairs Officer of Banglalink, told Prothom Alo that the high cost of spectrum renewal could create major financial pressure on telecom operators, ultimately affecting consumers.
According to GSMA data, the number of active mobile subscribers in the country declined by nearly 10 million between July 2024 and March 2026. During the same period, the number of mobile internet users fell by 13.3 million. The organisation believes high taxes on SIM cards and increased service costs are among the key reasons behind the decline.
Prime Minister’s Adviser on Posts, Telecommunications and Information Technology, Rehan Asif Asad, has hinted at tax reductions. Speaking at a seminar in the capital yesterday about tax adjustments in telecommunications services, he said, “We may not be able to solve all the problems in this budget. But we will be able to make visible progress toward solving them gradually.”
The Awami League government, which was ousted in the July mass uprising, had chosen telecommunications as an easy source of revenue collection. But high taxes on such services disproportionately burden low-income people. Both the rich and the poor pay taxes at the same rate on mobile services. Analysts stress the need to reduce such indirect taxes and increase direct taxes such as income tax instead.
BM Moinul Hossain, Director of the Institute of Information Technology at the University of Dhaka, told Prothom Alo that the impact of high taxes and various fees in the telecommunications sector ultimately falls on consumers. To maintain business operations and profits, operators increase service prices. He said the government must focus on making data and voice services affordable in order to make digital services more accessible.